When to share info

2012-01-27 00:00

THE competition law does not prohibit companies from sharing any information, but it does govern what types of information they may share.

This is the opinion of Ahmore Burger-Smidt, competition lawyer and director at Werksmans Attorneys, who pointed out that healthy competition cannot take place in a vacuum.

“Companies require certain types of information to compete effectively and win market share while operating within the parameters of competition law,” she said.

“For instance, it is vital to understand your competitors pricing strategy and how this could impact on your business.

“However, companies cannot share pricing strategy information amongst themselves and they must rather rely on generally available market intelligence to find out what such strategies are.”

Burger-Smidt said that a problem arises when companies are uncertain about what information can be shared with competitors.

“The big issue is the sharing of current and future information between competitors, given that the competition authorities have prioritised the detection, investigation and punishment of cartels.”

She said that the more concentrated a market sector in which sensitive or economically strategic information of a detailed and confidential nature is shared, the more likely this is to fall foul of the Competition Act.

“Red light” areas in which information should not be shared include sales and production targets, pricing and costs. Also on the “no sharing list” are investments, business strategy, rebates, discounts, bidding and tender procedures, customer information, confidential information and information that creates a competitive advantage, current information and individual company data.

However “neutral” information can be shared.

This includes: process type information that will result in industry efficiencies, public domain information and historic information.

A typical example of lawful information exchange would be the sharing of non-competitive information relating to health and safety issues in the mining or construction industries.

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